The Definitive Guide To Offshore Software Development

What Is Offshore Software Development?

Offshore software development is often perceived in varying ways and means different things to different people, so let’s clarify. In short, offshore software development is the hiring of an external development company or team located outside a customer’s continent to assist with development requirements. This may take the form of a fluid augmented team, brought in to help fill internal skill gaps as and when required, or a more traditional project-based approach where a fixed team delivers a predefined project. 

Whatever the case, it’s important to emphasise offshore software development is not moving technical capabilities to a different country with the aim of reducing costs. 

Why Companies Use Offshore Software Development

Faced with a growing demand for tech talent, widening skill gaps and a need for added development agility, it’s easy to understand why businesses are increasingly turning to offshore software development teams to meet their technical needs.

Access High Quality Developers With Niche Skills and Knowledge

Many companies experience technical skill gaps in their business and these can often have significant impacts on progress and success. In many instances, having access to the right experts can make or break a technical project, and so finding capable professionals is essential. Offshore software development teams offer high quality development resources that ensure technical work is delivered on time and to a good standard. 

Start a Project Quickly With Ready-Built Team

It’s not uncommon for businesses to have strict milestones or KPI’s around their development projects and so on some occasions, additional development assistance is required to stay on schedule. This is where offshore software development teams can really help. Offering a team of specialists ready to hit the ground running, businesses can tap into their technical capabilities quickly and effectively supercharge speed of development. 

Flexibly Scale the Delivery Team to Align With Development Requirements 

When it comes to delivering a technical project, various skills are often needed at different times and this means a flexible solution is required. A team augmentation approach with an offshore software development partner allows for teams to grow and shrink as needed, reactively bringing in the expertise necessary to deliver. 

Assist Internal Teams With Heavy Workloads and Provide Additional Support

Technical teams regularly work close to capacity, so when a particularly heavy workload is in the pipeline, an offshore software development team can provide the critical support necessary to avoid compromises on quality and timeliness. This also helps protect internal teams from burnout.  

The Role of Offshore Software Development in Overcoming Skill Gaps 

Many businesses turn to offshore software development opportunities when they can’t find the technical talent they need in their local area. With 70% of organisations in the technology industry experiencing skill shortages, it’s clear this is a widespread challenge that companies are increasingly struggling to overcome.

Sourcing high quality technical skills is rapidly becoming more difficult as demand is far outstripping supply.

Sourcing high quality technical skills is rapidly becoming more difficult as demand is far outstripping supply. With more technical roles available than ever, and a lack of skilled individuals to fill them, companies are turning to alternatives in order to tackle the issues created by the technical skill gap. 

The War for Talent

This skill gap is creating an all out war for talent on a global scale, particularly for niche technical skills and knowledge. To make the problem even worse, development languages are constantly evolving and so developers are specialising in order to keep up.  

Generalist developers are quickly falling behind and so are choosing a specific development language to pursue. This is further watering down the available technical talent. Faced with these challenges, forward thinking companies are tapping into offshore technical talent to fill the gaps.

Faced with these challenges, forward thinking companies are tapping into offshore technical talent to fill the gaps.

By taking this approach, they’re able to find and access the niche skills they need, when they need them.  

‘61% of senior UK business leaders state the technical skills gap is getting worse’ (Open University Business Barometer)

Common Challenges of Offshore Software Development 

While offshore software development can deliver significant benefits for businesses trying to overcome skill gaps with additional technical resources, there can be challenges to taking full advantage of the opportunity. It’s not uncommon for companies to experience issues with their offshore software development team that cause problems throughout delivery, and in some cases, undermine the entire project.  

The Partner Oversells and Underdelivers 

Some companies choose to skip the due diligence phase of the partner selection process and instead choose an offshore team to work with based on sales pitches and a glance at portfolios. This approach is incredibly risky as most teams will oversell their capabilities, without being able to deliver on the promises made. To avoid such issues, it’s important companies conduct proper due diligence on the teams they plan to work with, this helps confirm they have the resources, people and skills necessary to deliver. 

The Quality of Work Delivered Is Below Expectations 

This is a common challenge experienced when working with offshore software development teams, and is another that can be mostly avoided with a proper due diligence process. Understanding what a team’s high standards look like is key to understanding whether they’re equipped to deliver the project to the necessary level. 

Company Cultures Clash Impacting Output and Relationships 

For two organisations to effectively work together, they need to have similar working expectations and this is where company culture plays a role in successful development projects. If the company culture of the external partner differs significantly from the client, this can have a fundamental impact on the relationship, and the overall success of the project. The most successful projects involve two entities working together synergistically with similar approaches, philosophies and outlooks on delivery. 

Critical Deadlines Are Ignored or Missed

Deadlines often have mixed levels of importance, but realistically, they’re set for a reason. So when an external development partner fails to deliver on time, it’s a problem. Not only are there consequences that must be handled internally as a result, but it also brings into question the team’s future reliability and capability. In these instances, it’s important to know exactly why projects were delivered late - and how the problem can be avoided in the future. 

Unexpected Costs Arise 

In the standard offshore software development relationship, finances are typically agreed up-front. Both sides should have a clear understanding of the cost of delivery and there should be little room to move away from this agreement, unless the relationship is designed to be flexible by design, for example when using the team augmentation model. In less successful relationships, development teams will return to the client and request further resources. This can create conflict, particularly if finances have already been agreed. 

The offshore software development market is convoluted and highly saturated with suppliers and vendors boasting varying levels of professionalism, capability and competence. As a result, it’s critical to conduct proper due diligence on all potential development partners before signing any paperwork. It cannot be stressed enough how important it is to thoroughly evaluate partners across multiple criteria in order to maximise the chances of project success. 

The Very Best Tips for Hiring an Offshore Software Development Team 

Choosing an offshore software development team is a big decision. There are multiple factors to consider that will all influence your choice, and so it’s not something that should be taken lightly. These top tips should help you identify the best team for your needs. 

Identify Clear Objectives and Prioritise 

When hiring an offshore software development team, you need to have a clear understanding of what you want the project to achieve and how. This information plays a critical role in not only choosing a partner, but recognising what you need them to deliver and the capabilities required. 

Choosing an offshore software development partner is a big decision and so it’s essential that throughout the process all involved parties are aligned on objectives and priorities. With this detail in hand, you’ll be able to effectively audit the partners to identify which ones can best deliver. 

Without this critical information, choosing the right development partner is often a shot in the dark. Armed with so little data, it’s almost impossible to make a good decision as requirements remain undefined. Before choosing a development partner, the objective must be clear and guide the decision process.  

Agree Up-Front What ‘Done’ Looks Like 

The best offshore software development partnerships involve regular communication and mutual understanding on phrases, stages and language. This is particularly important when it comes to delivery. The terms, process and approach the project entails must be clearly agreed before documentation is signed. Both parties must have full appreciation for what they are signing up to and they need to have confidence they can deliver to the agreed deadlines. 

The terms, process and approach the project entails must be clearly agreed before documentation is signed.

Any exceptions, questions or concerns should be raised way before a final decision is made on partner selection. This ensures unforeseen challenges in the project don’t quickly undermine the relationship. 

With variables agreed up-front, both sides of the relationship have a full understanding of expectations and can work in harmony towards a single common goal. 

Evaluate Your Tech Partner’s Culture and How It Fits With Your Own 

Throughout the partner selection process, culture should play a major role in the selection criteria. It’s important to review every element of a partner’s culture to ensure it’s fully compatible and unlikely to create conflicts. Failure to effectively audit the culture of offshore software development partners can undermine relationships before the project even gets off the ground. 

Company culture dictates everything, from how employees communicate with one another to the developer’s institutional beliefs and priorities, everything they do is reflective of their cultural position. With this in mind, it’s easy to see why it’s integral to find a partner that shares similar professional and ideological beliefs. 

Culture lays the foundations for strong working relationships and so finding a partner you can relate with is key to the development of a successful technical project. 

Conduct Proper Due Diligence on Potential Technical Partners 

Effective due diligence is integral to finding the very best technical partners for your business. By conducting a detailed evaluation that looks at the same characteristics of each partner, comparisons can be made that help identify which are the best fit for your needs. Good due diligence typically considers each partner’s: 

• Previous work and projects 
• Skill sets and qualifications (with verification)
• Experience 
• The individuals who’ll be working on the project 
• Internal processes 
• Company culture 

The primary aim of this due diligence is to identify if the team in question has the skills, knowledge and capabilities necessary to meet the required standard. By reviewing processes, people and past projects, it becomes possible to see a snapshot of a developer and get a good appreciation for the value they can deliver. 

How to Check the Quality of Your Offshore Development Team 

Due diligence is critical to finding the right offshore software development team, but it only delivers value if conducted correctly. Due diligence approaches that fail to acknowledge and evaluate all key factors have the potential to provide an incorrect outcome which could fundamentally impact the team chosen and the success of the relationship. 

When it comes to making a final decision on an offshore software development team, knowledge really is power, and so it’s critical these key steps are conducted throughout the due diligence process. 

Review the Team’s Past Work, Case Studies and Portfolio

Ensuring the developer can walk the walk is essential. As such, it’s important to review their past work and ask questions to understand what they produced, and why. This will provide a good perspective on their capabilities and the quality of work they deliver. If the team’s output isn’t up to the standard required, then it’s easy to weed them out of the selection process. 

Evaluate Internal Operations and Core Processes 

Understanding how the team operates and the working methodologies they use will play a significant role in evaluating the value they can deliver. It’s important to ensure their processes are compatible and any queries are raised ASAP. Some teams will not naturally be a good fit and once recognised, it’s key that they are identified and removed from the selection process. 

Visit the Team Onsite 

Getting to know the team in person can often be a great way of evaluating the kind of people they are, and for getting a genuine view on how they operate and work as a team. If nothing else visiting in person allows for claims to be verified. This is particularly important around elements like company culture. Asking directly (off the record) can make all the difference. 

Assess Communication and Project Management Capabilities 

Technical delivery often involves multiple stakeholders working together towards a single common goal, and for this to be efficient and successful, project management needs to be tight and well organised. 

There needs to be clear systems in place that can oversee project delivery and involve the right people, at the right time.

There needs to be clear systems in place that can oversee project delivery and involve the right people, at the right time. Without such capabilities, it’s unlikely an offshore software development team could deliver to the necessary quality standards efficiently. 

Review Candidate’s CVs 

While reviewing a team’s accomplishments makes sense, the best due diligence processes go even further, evaluating the individuals within the team, including their personal capabilities accomplishments and working history. This provides a fuller picture and additional context when comparing development teams in the selection process. 

Audit the Company Culture 

When working with an offshore software development team, it’s likely their company culture will play a major role in everything they do. From how they communicate and work together, to delivery practices and job satisfaction, company culture covers it all and in many cases, can be a great indicator on an organisation’s happiness, productivity and general philosophy. 

Conduct Client Reference Calls 

While portfolio reviews are important, the best way to confirm the quality of a development team is to speak directly to their past clients. With no agenda, they are likely to be the most reliable source when it comes to evaluating the team. 

By interviewing previous clients, it becomes possible to identify common weaknesses and strengths in the partner’s delivery capabilities.

By interviewing previous clients, it becomes possible to identify common weaknesses and strengths in the partner’s delivery capabilities.

In addition, it also helps identify any red flags that may have been missed (or hidden) throughout the due diligence process. 

How to Manage a Failing Offshore Software Development Team  

Some offshore software development partnerships start successfully, but over time grow increasingly unproductive and in many cases, quality can drop too. This can often be attributed to any one of a number of reasons. 

The Team Has Lost Enthusiasm for the Project 

Keeping the external partner satisfied and engaged throughout project delivery is key to building a successful relationship. They need to be kept in the loop around developments within the business and regularly updated on their performance and the sentiment around their work - if they’ve done a good job, let them know! 

The Project Has Gone Over Budget and Missed Key Milestones 

Effective project delivery and budgeting requires effective management. Some offshore software development teams lack the organisation necessary to deliver large projects effectively and this can cause them to miss deadlines, which can have significant consequences. To ensure it doesn’t happen repeatedly, it’s important an experienced project manager is put in place. This person should go in, evaluate the problems and determine why the project is going over budget and taking longer than originally agreed to deliver.  

Key Staff Have Been Phased out and Replaced by Juniors 

It’s not uncommon for less scrupulous teams to start a project with senior staff heading up delivery, before progressively bringing in junior staff over time. This ‘bait and switch’ approach typically creates major issues as the replacement staff often lack the skills and expertise to deliver to the necessary quality on time.

To avoid this issue, preemptive action is required, it’s important to regularly monitor who is working on projects and flag if there is particularly high turnover. By remaining vigilant, this ‘bait and switch’ trap can be avoided. 

The Future of Offshore Software Development 

Offshore software development is set to grow rapidly in the future with companies increasingly struggling to combat skill gaps and find the technical talent they need. To overcome this challenge, offshore software development projects will play a key role, enabling companies to source and utilise niche talent on-demand. 

Growth in offshore software development is likely to be powered by companies aiming to:

Develop a Competitive Edge Over Their Rivals With Industry Leading Talent

By working with offshore software development teams, businesses will be able to tap into world class talent that enables them to make the most of their technologies. This will help drive productivity throughout delivery while also optimising the quality of the final output. 

Reduce Brick and Mortar Expenses 

Through the engagement of an offshore software development team, companies can avoid internal overheads and the infrastructure required to support internal delivery. This helps to keep costs to a minimum and reduce expenditure, which is critical when the resource requirement is only temporary. 

Limit the Strain on Internal Teams

The technical skills gap means replacing internal team members can be very difficult and so it’s in most businesses’ interest to minimise staff turnover. To do this, they need to offer a good work-life balance and help individuals avoid burnout by limiting crunch wherever possible. This is where offshore software development teams can help, reducing the pressure on internal staff and helping the company to retain key internal staff. 

Businesses will increasingly turn to dedicated remote development teams to meet their development needs. At this moment in time, many are not ready to embrace offshore software development, but this will quickly change as the benefits of such an approach become all the more obvious. 

Only 28% of companies state they’re ready to tap into the alternative workforce (Staffing)

Dedicated engineering teams will continue to grow over the next 5-10 years as companies continue to struggle with the technical skills gap and look to alternatives. The taboo of leveraging remote teams is quickly disappearing and decentralising development is more acceptable than ever. These trends will drive uptake and continue to see remote development opportunities expand long into the future.